Employers back wage hike

Employers back wage hike

Workers hold signs calling for a daily minimum wage of 492 baht at Democracy Monument on Labour Day, May 1.
Workers hold signs calling for a daily minimum wage of 492 baht at Democracy Monument on Labour Day, May 1.

The Employers' Confederation of Thai Trade and Industry (EconThai) has come out in support of a daily minimum wage hike if the increase is appropriate based on current inflation.

The pay rise is currently being considered by the tripartite national wage committee.

Tanit Sorat, vice-chairman of EconThai, said he expects the final rate to be decided as soon as September, which should help workers cope with higher living costs amidst the global oil price surge, driven by the Russia-Ukraine war.

Higher energy prices are the main reason Thailand's headline inflation rate surged, as measured by the consumer price index. The rate hit a 13-year high in May.

The Trade Policy and Strategy Office reported earlier this month headline inflation hit 7.1% in May, accelerating from 4.7% in April.

"The business sector agrees with a wage rise, but it must match economic conditions, the efficiency of workers, employers' ability to pay, and competition in businesses," said Mr Tanit.

In an open letter to the government ahead of Labour Day on May 1, the Thai Labour Solidarity Committee and the State Enterprises Workers' Relations Confederation called for a new daily minimum wage of 492 baht.

They said the last wage increases were in January 2020, which took the minimum rate to a range of 313 baht to 336 baht.

EconThai said if the wage hike was too high, it would severely affect small and medium-sized enterprises (SMEs) and micro-SMEs. Neither group can afford to pay high wages as their operation costs would dramatically increase, he said.

Many SMEs have not fully recovered from the impact of lockdown measures enforced during the pandemic. Higher wages may cause them to push the cost burden onto customers by increasing prices, or they may face bankruptcy, the confederation said.

With an inflation rate of 7.1%, EconThai suggested the committee consider increasing the minimum wage by around 23 baht a day, or 700 baht a month.

"If the committee agrees with this rate, it will cause no problems for large companies, but we are unsure whether it will affect SMEs and micro-SMEs. This issue requires careful consideration," said Mr Tanit.

He said the new daily minimum wage must benefit all workers, allowing them to mitigate rising living expenses and make ends meet.

EconThai expects Thai employment prospects in the second half of this year to improve as tourist numbers increase, following the reopening of the country and further easing of international travel restrictions. Businesses will consequently hire more workers, said the confederation.

"There are around 3.9 million workers in the tourism industry, but not all of them will benefit from more job opportunities," said Mr Tanit.

"We expect 8-10 million foreign tourists to visit Thailand this year, much lower than before the pandemic."

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